Israeli outlet Ynet has reported that Israeli Coalition Chairman MK Zeev Elkin (Likud) and MK David Rotem (Yisrael Beiteinu) are pushing for legislation that would revoke tax concessions of nonprofits that ‘act against the nation’s policies.’

The new proposal follows close on the heels of the enactment of a new law (full translation below) entitled ‘Duty of disclosure for recipients of support from a foreign political entity’, passed by the Knesset on 21 February and added to Israel’s statute book on 2 March.

The new law demands that Israeli NGOs submit and publish quarterly reports on any funding received from foreign governments or foreign publicly-funded grant-makers, including detailed information on any oral or written undertakings made to the funders.

All nonprofits in Israel must already report annually on all sources of funding to the Registrar of Associations.

The new law will demand more frequent reporting on the part of liberal groups to ensure they keep their nonprofit status. It will mainly affect human-rights groups and peace organisations, because they are heavily dependent on funds from the EU and other western governments, whereas right-wing and settler groups are funded largely by wealthy foreign individuals and non-governmental endowments.

The World Zionist Organisation, the Jewish Agency for Israel, the United Israel Appeal , the Jewish National Fund and their subsidiary corporations are specifically exempted from the requirements of the law.

According to Ynet, the Members of Knesset who initiated the law, in coordination with Prof. Gerald Steinberg of the right-wing group NGO-Monitor, are now seeking to expand it, by demanding that NGOs publicly disclose their local and international advocacy efforts, and by revoking tax exemptions from them if they are seen to oppose state policy.

The anti-boycott bill
On Monday, another restrictive bill passed its first reading in the Knesset plenary.

The ‘Bill for prevention of damage to the State of Israel through boycott – 2011’ (full translation below) seeks to outlaw any boycott of individuals or institutions connected to Israel or to the illegal Israeli settlements in the Occupied Palestinian Territory.

Those calling for boycott can be sued for damages under the law, and companies participating in boycott of settlements may be denied permission to participate in public tenders. The initiators of the bill, from both coalition and opposition parties, are also discussing the possibility of defining boycott as a criminal offense.

Israeli human rights groups and activists, who will be the main targets of the bill, have sharply criticized it, citing freedom of expression and defending their right to legitimate nonviolent protest against government policies. Fifty-three Israeli organizations, including some opposed to the use of boycott as a tactic, have signed a petition against the bill.

(Unofficial English Translation)

Book of Statutes, 2 March 2011, 2279

Duty of disclosure for recipients of support from a foreign political entity - 2011

1. Definitions:
In this law –
• “Foreign company”; “charitable corporation”; “Registrar of Bequests” – as defined in the Law of Corporations (1999)
• ” Law of Associations” – Law of Associations 1980
• “Foreign Political Entity” and “donation” – as defined by Section 36a (a) of the Law of Associations
• “Recipient of Support” – an association or charitable corporation that receives a contribution from a foreign political entity;
• “Registrar” – Registrar of Associations, or Registrar of Bequests, as relevant.

2. Duty of quarterly reporting
A recipient of a contribution from a foreign political entity must within a week of the end of that quarter in which the contribution was received submit to the Registrar an online report as determined by the Minister of Justice (hereinafter: quarterly report) detailing:

(1) The identity of the provider of the contribution

(2) The sum of the contribution

(3) The purpose or designation of the contribution

(4) The provisions of the contribution, including undertakings made by the recipient of support to the foreign political entity, orally or in writing, directly or indirectly, if such were made.

3. Existing obligations
Submission of a quarterly report shall not derogate from reporting obligations applicable to the recipient under any other law.

4. Publication by the registrar
The registrar shall publish the list of recipients of support who submitted quarterly reports on the Ministry of Justice website; moreover the registrar shall publish the information received under Section 2 on the Ministry of Justice website and in any other form he deems fit.

5. Publication by the recipient of support
(1) If the recipient of support or entity acting on its behalf has a website, the recipient of support must prominently publicize the information in the quarterly report submitted;

(2) If the recipient of support receives a contribution from a foreign political entity for purposes of funding a specific publicity campaign, the recipient of support shall publicize receipt of this support as a part of the campaign.

6. Obligation to ascertain sources of funding
Associations or charitable corporations shall to the best of their ability ascertain whether contributions received by them are from a foreign political entity.

7. National institutions
The provisions of this law shall not apply to the World Zionist Organisation, the Jewish Agency for Israel, Keren Hayesod–United Israel Appeal or the Jewish National Fund, or to their subsidiary corporations.

8. Implementation and Regulations
The Minister of Justice is appointed to implement this law, and he is authorized to enact regulations for its implementation.

9. Amendment No. 13 to the Law of Associations
In the Law of Associations (1980)
(1) In Section 36a

a. In subsection (a), in the definition “foreign political entity”, after para (3), insert:

“(14) a foreign company whose turnover in the last fiscal year it was
obliged to submit a financial report for, was mostly from bodies detailed in
paras (1) to (3);”;

b. In subsection (b)(2)(d), after “the provisions for the contribution”, insert:

“including undertakings given by the association regarding the contribution, orally or in writing, directly or indirectly,”;

(2) In Section 64a(1), after “in accordance with this law” insert: “or in accordance with the duty of disclosure for recipients of support from a foreign political entity – 2011.”

10.
In the Law of Corporations (1999), in Section 354(b1) –

(1) In para (1), after subpara (d) insert:

“(e) violation of this duty as detailed in Section 2 of the duty of disclosure
for recipients of support from a foreign political entity – 2011.”;

(2) In para (5) in the first part after “as detailed in paras (1)(a)”, insert: “or (e)”.

Benyamin Netanyahu
Prime Minister

Yaakov Neeman
Minister of Justice

Shimon Peres
President of the State

Reuven Rivlin
Chair of the Knesset

Hebrew original: http://www.nevo.co.il/law_word/law14/law-2279.pdf

Bill for prevention of damage to the State of Israel through boycott – 2011

Definition
1. In this law, “boycott of the State of Israel” - deliberate avoidance of economic, cultural or academic ties with a person or other party, solely for reason of his/her/its relation to the state of Israel, to any of its institutions or to any area under its control, which could cause them economic, cultural or academic harm.

Boycott – a civil wrong
2. (a) Anyone who publishes a public call for a boycott of the state of Israel, and its content and circumstances may reasonably be expected to lead to a boycott, and the publisher is aware of this possibility - is committing a civil wrong and the law of Tort [new version] shall apply to him/her.

(b) Regarding Section 62a of the law of Tort [new version] causing breach of contract by calling for a boycott of the state of Israel shall not be seen as sufficient justification.

(c ) If a court finds that a wrong has been committed under this law, it shall be permitted to order the party committing the wrong to pay compensation independently of actual damage done (exemplary damage). When determining the sum of compensation the court shall take into account the circumstances of the wrong, its severity and its scope.

Regulations regarding restrictions on participation in a tender
3. The Minister of Finance is permitted, pending authorization by the Constitutional Committee of the Knesset, to set regulations regarding restrictions on participation in a public tender, due to undertakings made by a party making an offer to participate in a boycott of the state of Israel, including undertakings not to purchase products or services produced or provided in the state of Israel, in any of its institutions or in an area under its control.

Implementation
4. The Minister of Justice is appointed to implement this law.

Explanatory notes

The aim of this law is to prevent damage caused by the phenomenon of boycotts imposed on various parties due to their relation to the state of Israel. The boycotts are liable to damage trade, cultural or academic activities of the target of the boycott and to cause it grave damage, both financial and reputational.

In order to prevent such damage, we have proposed that conscious publication of a public call for imposition of a boycott on any party due to its relation to the state of Israel shall be considered a civil wrong to which Tort law shall apply, i.e., that will enable receipt of compensation due to the damage done by the wrong. It is already possible today to sue for damage caused by a boycott, in suitable circumstances, due to the wrong of breach of contract or the wrong of negligence. The bill aims to define a new civil wrong that shall apply even in cases that do not fall under these wrongs and will enable persons or parties damaged as a result of boycott imposed on them due to their relation to the state of Israel to sue for damages.

Grounds for suit under this new civil wrong shall be a public call for boycott, in circumstances in which it is reasonable to expect that such a call will indeed cause imposition of a boycott. Moreover, the person committing the wrong will be required to be aware of his conduct and of the possibility that the call will lead to imposition of boycott.

As with other civil wrongs, it will be possible to sue for compensation for damage that was actually caused to the target of the boycott. In addition to the general regulations of the law of Tort, we propose that the court be allowed to set exemplary damages too, if the circumstances justify this.

Moreover we propose that the Minister of Finance set restrictions on participation of parties who have undertaken to participate in boycotts of the state of Israel in public tenders. The bill does not relate to the decisions of individuals whether and from whom they should purchase products and services, but deals with organizing for deliberate withholding of ties from persons or parties, solely due to their relation to the state of Israel.

When preparing the bill for 2nd and 3rd readings the Constitutional Committee shall discuss other aspects of the phenomenon of boycotts and will examine the possibility of defining a criminal violation (cf US Federal Law Export Administration Act, 50 U.S.C (1979), which sets out prohibitions due to trade restrictions or boycotts, imposed or supported by states against states friendly to the US or against citizens of the US).

MKs: Zeev Elkin, Dalia Itzik, Arieh Eldad, Ophir Akunis, Moshe Gafni, David Rotem, David Azulai, Zevulun Orlev, Yariv Levin, Chaim Katz, Tzipi Hotoveli, Lia Shemtov, Robert Iltuv, Avraham Michaeli, Yaakov Katz, Ruhama Avraham-Balila, Karmel Shama, Dani Danon, Alex Miller, Yitzhak Vaknin, Uri Maklev.

2.3.2011

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